Does your start-up need a Head of Tax?
As a start-up navigating the complexities of growth, your focus is likely on product development, market penetration and scaling operations. However, an often-overlooked aspect of growth is tax strategy. For many companies, especially those anticipating rapid expansion or considering investment, the question arises: does your start-up need a Head of Tax?
Whether your start-up has received new rounds of investment, or your portfolio business is entering a new phase of growth, scaling up any business is an exciting time. However, with this comes the need for strategic hires who can help your organization grow. It is essential that you secure the right talent for your organization at the right time. These individuals will often have highly specialized skills and unique expertise critical to your organizations success.
What does a Head of Tax do?
A Head of Tax is responsible for overseeing a company’s tax strategy, compliance and risk management. This role typically encompasses several critical functions:
- Tax compliance: Ensuring the company meets all local, state and federal tax obligations
- Tax planning: Developing strategies to minimize tax liabilities while following regulations
- Communication with investors: Providing insights on tax implications for potential investment structures and exits
When to consider hiring a Head of Tax
Rapid growth and scaling
If your start-up is experiencing rapid growth, the complexity of your tax situation can increase significantly and quickly. New revenue streams, potential international expansion and changes in operational structure can create challenges that only a seasoned Head of Tax can navigate. An expert can ensure that your company is not only compliant but also strategically positioned to minimize tax liabilities.
Investment rounds
As your company seeks funding, the intricacies of tax implications become paramount. Investors want to understand the tax efficiency of their investments and any potential liabilities that may arise. A Head of Tax can help these discussions, ensuring that both your start-up and its investors are well-informed.
Mergers and acquisition
If you are considering an acquisition or merger, having a Head of Tax is
critical. The tax implications of these transactions can be complex and
far-reaching. An internal tax expert, who understands your business, can
conduct due diligence, assess tax liabilities and structure deals in a way
that maximizes value for your company and its stakeholders.
Navigating regulatory changes
Tax laws are constantly evolving, and staying compliant can be a
daunting task for start-ups. A dedicated Head of Tax can help your company
adapt to these changes, ensuring that you are not only compliant but also
taking advantage of new incentives or deductions.
Internal expansion
For start-ups looking to expand internationally, understanding the tax landscape in different jurisdictions is crucial. A Head of Tax can help assess the tax implications of international operations, navigate double taxation treaties and ensure compliance with local tax laws.
An internal senior tax hire vs. external expertise
While hiring a Head of Tax represents an additional expense, the potential benefits can outweigh the costs, particularly for growing companies. Critically, an internal tax hire is an expert on the tax affairs of your business. They are aligned with your business’s goals in a way an outsourced service may not share the long-term vision. Moreover, effective tax planning can lead to significant savings, making the role self-funding in many cases.
However, we do appreciate that making such a senior hire, might be daunting, therefore we do recommend businesses hire a fractional Head of Tax to aid during periods of particularly robust growth.
How Brewer Morris can help you hire a Head of Tax for your start-up or portfolio business
As your start-up evolves, the complexities of tax compliance and strategy will likely increase. Whether you decide to hire a Head of Tax or explore alternative solutions, the importance of having a robust tax strategy cannot be overstated. By proactively addressing tax issues, you position your company for sustainable growth and instill confidence in your investors.
Investors should also consider the tax implications of their investments in start-ups. A well-structured tax strategy can enhance returns and mitigate risks, making the question of whether your start-up needs a Head of Tax a critical consideration for all stakeholders involved.
In the fast-paced world of start-ups, the right tax strategy can be the difference between merely surviving and thriving.
If you are looking to hire a Head of Tax for your start-up, please don’t hesitate to submit a brief and a member of our team will be in touch.
Alternatively, if you are looking for a new Head of Tax opportunity, look at our latest opportunities.
